TSC Ratings' Updates: Kimberly-Clark

The following ratings changes were generated on Wednesday, March 11.

We've downgraded sporting-goods retailer Dick's Sporting Goods(DKX) from hold to sell, driven its deteriorating net income, disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Net income decreased to -$104.4 million in the most recent quarter from $73.2 million in the year-ago quarter, significantly underperforming the S&P 500 and the specialty retail industry. Return on equity also greatly decreased, a signal of major weakness within the corporation. DSG's 31.2% gross profit margin is lower than desirable, having decreased from the year-ago quarter, and its -8.6% net profit margin is significantly below the industry average. EPS are down 250% compared with the year-earlier quarter, though the consensus estimate suggests that the company's two-year trend of declining EPS should reverse in the coming year.

Shares have tumbled 50% over the year, underperforming the S&P 500, which could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

We've initiated coverage on EnergySolutions(ES), which provides technology-based nuclear services, at sell, driven by its generally weak debt management and poor profit margins.